More questions than answers in Conn lawsuit

Jack Lattajlatta@civitasmedia.com

February 21, 2013

PIKEVILLE — The federal lawsuit against Eric C. Conn could eventually have implications for some of his Social Security clients, but those individual cases are not up for scrutiny in current case, which was filed against the well-known Floyd County lawyer and an administrative law judge who acted as his alleged rubber stamp.

According to a complaint filed in 2011 in United States District Court in Pikeville, and which only became public Tuesday, the plaintiffs are seeking to recover fraudulently obtained disability benefits and attorney’s fees paid by the government to Eric C. Conn and Eric Conn P.S.C.

In the complaint, the attorneys for the United States state that these claims originate from a fraudulent scheme coordinated between Conn and Social Security ALJ David B. Daugherty, and involved Daugherty wrongfully taking control of a large number of Conn’s Social Security cases “from randomly assigned administrative law judges and conducting sham proceedings, resulting in the Conn clients overwhelmingly and fraudulently obtaining successful rates.”

During 2010, Daugherty approved 99.7 percent of all Social Security claims, while the national average was 62 percent.

According to SSA guidelines, because disability causes developed such large practices, a requirement was instituted that such cases be randomly assigned to administrative law judges on a rotating schedule, in order to prevent attorneys and ALJs from developing “too cooperative a relationship.”

In an interview with The Floyd County Times, Benjamin Vernia, counsel for the plaintiffs, said he could not forecast whether or not individual claims made through the Conn/Daugherty hearings would be affected.

“That’s an interesting question,” Vernia said. “I’m not sure how that’s going to work out. Conn and Daugherty are jointly responsible. We don’t need to bring in claimants to get a judgment against the defendants.

“That’s really a matter for the Social Security system. Our concern is the corruption of the process, and not whether a specific claim needs to be reopened or not.”

Officials with the Social Security Administration, Office of Inspector General, had not responded to requests as of press time on how a potential judgment against Conn and Daugherty might affect the claims.

According to the complaint, Daugherty allegedly sought out and took control of the Conn claims which were not assigned to him by removing files from the desks of other ALJs, clerks, and the master docket cabinets. Also stated in the claim is that Daugherty routinely scheduled as many as 20 of Conn’s claims a day for on-the-record hearings at 10-minute intervals.

In 2010, Daugherty reviewed 1,284 cases and granted benefits to all but four.

Daugherty and Conn’s relationship was brought to light in a 2011 Wall Street Journal article, and Daugherty himself was noted in a recent U.S. Senate investigative report into Social Security disability programs.

In the report, it stated that the committee found that there was significant stress being put on the Disability Trust Fund due partly to the fact that “the number of individuals receiving disability benefits continues to rise at an unprecedented rate.”

Daugherty was among those cited in the report. Daugherty retired in June 2011.

In a statement released to The Times, Conn briefly states that, “It is noteworthy that the U.S. government studied this lawsuit for a year-and-a-half and decided not to join it or get involved.”

On his firm’s website, Conn ties his commitment to integrity and ethics to his military career: “As a combat veteran and former U.S. Army captain, honor and integrity are important parts of my practice.”

In 2009, Conn lobbied the administration of newly-elected President Barack Obama to be made the czar of the Social Security Administration.

The lawsuit was filed in October 2011. According to Vernia, the federal judge in the case found that only three documents contained information that should remained sealed. The United States has until March 1 to file any further motions to keep the remaining documents sealed.

Vernia said that when a case like this is filed, it is routine to have discussions with the U.S. Attorney General’s office regarding any potential future criminal charges, but stated that he could not comment on those discussions.